Think Tank Review: In July, Russian think tanks were preoccupied by the implications of MH17, economic sanctions and the BRICS summit in Brazil.

The effects of Western-led sanctions may soon begin to become apparent. Photo: RIA Novosti

In July, members of the Russian expert community were focused on three key events: Western sanctions, the crash of the Malaysian Boeing 777 in Ukraine and the BRICS summit in Brazil. While experts were mixed on the ultimate economic impact of Western sanctions and the creation of new BRICS institutions, they were unanimous on one point: MH17 was a serious blow to Russia’s image on the international stage.

Waiting for Western sanctions to deliver a knockout blow

For some time now, representatives of various Russian think tanks have debated to what degree the Western policy of more stringent sanctions will impact Russia. This July, publications on this subject increased with a new set of tougher measures from the EU and the U.S. that could affect the very heart of the Russian economy: the oil and gas industry.

Some analysts still believe that sanctions cannot seriously affect the Russian economy and politics. Thus, for example, Andrei Sushentsov, an expert at MGIMO (the Moscow State Institute of International Relations) explains that, “Moscow is ready to endure the sanctions because it is fair to believe that they will not have a profound impact on the Russian economy.”

“The relationship between Russia and the EU is such that a reduction in contact would hurt both. In addition, such a large country as Russia is difficult to isolate,” he said.

He is supported by his colleague from the Council for Foreign and Defense Policy (CFDP) Mikhail Remizov, who emphasized the interdependence of Russia and other countries. “The restrictions imposed not only hurt Russian, but also many American and European companies,” he writes.

Georgy Bovt, a CFDP expert, has written on how the sanctions are unlikely to affect the political system, and he notes that the Russian people, in all senses of the phrase, are no strangers to hardship.

“And the people? They are always ready for whatever comes next," he writes. "Russian citizens are historically used to living in a besieged fortress. Although the separate troubles of the Russian oligarchs, of course, could lead to some pushback, pressure on the regime from the outside as a whole may lead to consolidate the nation against external threats.”

Some even say that the sanctions can have a positive effect. Sanctions organized by the U.S. can push the Russian economy to modernize itself by reducing its reliance on oil and gas resources, suggests Dmitri Trenin, Director of the Carnegie Moscow Center.

Meanwhile, there remain a fairly large percentage of experts who do not agree with their colleagues and believe that Russia is slowly but surely heading for economic and political collapse.

This was, for example, the opinion of Lilia Shevtsova, an expert at the Carnegie Moscow Center.

“We have entered a new stage, indeed. This is a trap from which no one knows how to escape,” she writes. “And it is possible that we are already bearing witness to Russia’s slide into a financial abyss.”

Igor Yurgens of the CFDP develops this idea further. “These sanctions now will affect the lives of the everyday citizen. They will increase all prices by initiating a depreciation of the ruble. There will be a lack of some expensive drugs, some essentials won’t be available for purchase, and the food market will take a hit,” he cautions.

Moreover, many analysts question whether such activities by the West should not only be considered violations of WTO rules and regulations, but also of human rights. In particular, international law expert from MGIMO Dmitri Labin comments that, “The modern world order is based on the sovereign equality of states, accordingly, and the punishment by one state of another is unacceptable. It really is a gross violation of the generally accepted principles of international law.”

He also adds that the sanctions run contrary to WTO rules, “Ever since 1995 the rules of the World Trade Organization have been in effect. This organization was founded as a function for providing states with mechanisms to resolve any economic complications with each other. And it also prohibits the retaliatory leveling of economic sanctions.”

Also interesting is the opinion of another expert from MGIMO, Oleg Barabanov. He suggested creating a boomerang effect by “launching a campaign to boycott American goods, which would be most the emphatic and effective response to the sanctions.”

What the general public in Russia thinks about sanctions

MH17 as a deep blow to Russia’s international prestige

Russian experts are unanimous: The catastrophe in the sky over Ukraine caused great damage to the image of Russia in the international arena. While it may no longer be able to define who is really to blame for the crash, the whole burden of responsibility in the form of new sanctions will fall on the Russian Federation.

The tragedy that occurred with the Malaysian Airlines Boeing caused a wave of anti-Russian sentiment throughout the world. It is precisely this negative reaction that Russian experts are writing about, noting that in reality, for the Western public it isn’t so important who is to blame for the tragedy, because Russia has been publicly accused, and therefore, it is necessary to take measures against it.

Shevtsova, from the Carnegie Moscow Center, explains that, “The crash of the Malaysian airliner in Ukrainian airspace has moved the Ukrainian drama into a new dimension and a new international context. The West will inevitably be forced to respond to this act of international terrorism with a package of political, economic, and, most likely, military action."

At the same time, CFDP expert Karaganov writes that, “This unforeseen catastrophe, the destruction of the Malaysian Boeing… whoever knocked it out of the sky may be one more step towards deepening the international political crisis over Ukraine."

CFDP's Timofei Bordachev also explains what such a harsh response by the West actually means. “The statement issued by the official representative of the U.S. administration that it was Russia and its president who are to be blamed for the deaths of the civilian aircraft in Ukraine marks their final choice in favor of Washington's confrontation with Moscow and unwillingness to compromise,” he writes.

The BRICS and Russia’s goal of a multi-polar world

In July, BRICS became the subject of more news articles than all of last year. This is due to the recent BRICS summit and the importance of the decisions made there for the further development of the association and the world's political, economic and financial systems.

Alexei Chernyshev from the Russian International Affairs Council even called the summit “a test of strength” for the BRICS, given that this summit was intended “to finally start to realize the potential for cooperation and to prove the validity of claims to a leading position in the international system.”

Kirill Koktysh from MGIMO explains: “BRICS members are interested in becoming a center of power. These are pretty powerful ambitions... and this proposal to convert BRICS into a center of power must, at least, be diluted with today's multi-polar system, thereby possibly balancing it and turning it into a sustainable system.”

His colleague from MGIMO Ekaterina Arapova also notes that, “The sixth BRICS summit made ​​a significant contribution in strengthening global financial stability and in strengthening the position of the fastest growing countries in the world arena.”

Fyodor Lukyanov from CFDP comments that “all BRICS countries potentially represent not just emerging powers, but the main “poles of regional centers for a multi-polar world. And they are certain they have a right to be more than just a deliberative voice in the world order,” he writes.